SARASWATI KUMAR SINHA Vs. STATE OF BIHAR

JUDGEMENT

(1.) UNDER a contract in writing, the appellant proposed to purchase and the respondent - Board proposed to sell on hire - purchase basis a property, being the subject matter of the agreement. The agreement fixed the tentative price of the property in question and required the appellant to pay the same by equated monthly instalments on the dates as mentioned in the agreement.

(2.) The agreement provided that in default of payment of the equated instalments of the tentative price, the defaulted amount shall carry interest at the rate and in the manner as mentioned in the agreement. According to the appellant he has paid the tentative price by equated monthly instalments and also interest as was required to be paid for the delay in payment of such equated instalments on some occasion. It appears from a document annexed to the writ petition that even the Board acknowledged the fact that the appellant has paid whatever he was required to pay on account of tentative price of the property in question. After the appellant submitted stamp papers for obtaining conveyance to complete the transaction, while a decision was taken not to proceed further with the matter of registration of the conveyance on such stamp papers, a demand was raised upon the appellant and that aggrieved the appellant entailing filing of the writ petition, which having been dismissed, the present appeal has been preferred. The agreement in question provides that the final cost will be determined upon consideration of escalation, if any, of the cost of acquisition of the land, upon which the property is situate, as well as the construction cost. In the event, the subject land had been acquired at a price higher than the estimated price and if the construction cost is also higher than the estimated price, then of course in terms of the agreement the appellant is liable to pay the difference. Therefore, if, in fact, there had been a cost escalation, the appellant ought to have been informed in relation thereto with a request upon him to pay the difference. Upon failure on the part of the appellant to pay the same on or before the date fixed for such payment, as intimated, it goes without saying the appellant could be exposed to interest liability. From the papers produced, however, it does not appear that the appellant was informed about the cost escalation. He was only informed that he was required to pay certain additional amount on account of the property in question.

(3.) THE agreement in question contains an arbitration clause. The parties having chosen a forum to resolve their disputes through that forum, should be relegated to that forum. Accordingly, we direct the appellant to refer the disputes being the subject matter of the writ petition to the Arbitrator named in the arbitration clause contained in the agreement in question, whereupon the said Arbitrator shall enter upon reference and decide the matter in accordance with law.